India’s Largest Refiner Fails To Secure Shipowners After Receiving No Bids For Strait Of Hormuz Tanker Tender

Indian Oil Corporation (IOC), India’s largest refiner and fuel retailer, has received no bids for its tenders to charter ships to transport crude oil and liquefied petroleum gas (LPG) from ports in the Strait of Hormuz, according to two trade sources familiar with the matter.

The failed tender shows that many shipowners are still unwilling to send their vessels into the Gulf, even though shipping through the Strait of Hormuz has started to recover.

Many owners are waiting for more clarity on the security situation before agreeing to new voyages.

Last week, IOC invited bids to charter three vessels, a Very Large Crude Carrier (VLCC), a Very Large Gas Carrier (VLGC) and a Suezmax tanker.

Indian state-owned refiners usually buy crude oil and LPG from Middle Eastern producers on a free-on-board (FOB) basis, which means they are responsible for arranging the ships to transport the cargo.

IOC wanted to charter a VLGC to load about 45,000 metric tonnes of LPG between June 30 and July 4 from Ras Laffan in Qatar, Mina Al Ahmadi in Kuwait, or Ruwais in the United Arab Emirates.

The company also planned to charter a VLCC to load crude oil from Mina Al Ahmadi between June 28 and 29, and a Suezmax tanker to load crude from Ras Al Khafji in Saudi Arabia between June 29 and 30 for delivery to India’s west coast.

However, trade sources said none of the tenders received any offers.

“No one wants to take a risk as yet of going into the Strait,” a ship broker said. “Most ship owners are in wait-and-watch mode as they want clarity on the terms of getting into the strait,” the broker added.

Although the Strait of Hormuz tentatively reopened late last week and vessel traffic has started to increase, especially with outbound tankers that had been delayed in the Gulf, many shipowners and operators are still reluctant to send ships into the Gulf to pick up cargoes.

According to trade sources, many owners want to be sure their vessels can safely enter the Gulf and complete their voyages without the risk of becoming stranded if the security situation worsens again.

References: thehindubusinessline, Reuters